11.1.13

How not to counter criticism: the Derwick Associates case

LONDON
—.
It has become standard in the Western world to expect to find
information about everyone and everything via the internet.
Individuals and corporations alike consult search engines
to form an impression of potential friends, hires, business partners,
or supported candidates. Prominent negative information can cost
jobs, deals, marriages, and lawsuits. Some persons and firms invest
in expensive online reputation management campaigns, as partial
recognition of this fact.

Countering bad press has become so
important that successful public relations firms and private spin
doctors can name their price. The best of this bunch
are the ones no one know about. However, public relations or spin, resuscitating public image ultimate relies on analysing claims
against a client to determine veracity and undermining the
credibility of a client’s critics. Broadly speaking, exposed
companies and individuals are expected to take an active role in
preserving their images. Some are discreet, some are very loud.
Needless to say, the last thing a party trying to avoid public
exposure should be doing is to draw more attention to itself,
right?

Not in Venezuela. Consider the case of Derwick
Associates, a company that appeared overnight, and won 12 thermoelectric contracts from high officials of the Chavez regime in
the space of 14 months. Twelve contracts, arguably worth
billions of dollars, in fourteen months. There is a journalist in
Caracas, Cesar Batiz, who
grew suspicious of Derwick’s business, partially due to the
fact that he had previously
worked in the electricity sector. Batiz started asking questions
about Derwick Associates, questions that any competent journalist
would ask: why was this company favoured over others? Why did the
government grant so many contracts to a company without a track
record? How come no calls for public tenders were made? Who decided
what, where, when? How much public money was spent? Have the projects
been completed? Who are the people behind Derwick? In sum, the sort
of questioning to be expected by any company doing public deals in
any democracy.

The trouble is that Venezuela is not a
democracy, and Derwick Associates is not a regular company. All
contracts granted to Derwick were necessarily decided by an
unidentified high official, who, almost certainly, received a
nice commission from the deal. The Venezuelan contract system is a
revolving door of sorts, whereby those granting contracts condition
their granting on the basis of percentage of commissions. And so
Batiz started digging and found a few road blocks. His enquiries took
him to public institutions that point blank refused to answer his
legitimate questions. So he upped the ante, and took some of the
parties to court, which refused point blank to force public servants
to release public information about contracts paid for with public
money. There is no such thing as the Freedom of Information Act in
Chavez's socialist paradise. Batiz’s editor, Eleazar Diaz Rangel,
took an interest in the story, and went himself to the Prosecutor's
Office to formally request an investigation. Again,
nothing came of it.

Derwick did not respond to Batiz, his
articles, or his requests for information. Instead, it
sued Oscar Garcia Mendoza, a banker, in a Florida court, for
supposedly orchestrating a "defamation campaign". It did
not sue Batiz. It did not sue his editor, Diaz Rangel. It did not sue
the newspaper where Batiz works, Ultimas Noticias. No. Derwick rather
sued a banker with no connection to either Batiz, Diaz Rangel, or
Ultimas Noticias. It did not sue in Venezuela, but in the USA. It did
not sue in Spanish, but in English, thus facilitating spread of
information about its actions online. One can only ask: why?

A
year ago, only a handful of people knew about Derwick. Now
governments know about Derwick, banks know about Derwick, authorities
know about Derwick, even Wikipedia
has an entry on Derwick, and worse of all, Google and its ubiquitous
archives have many more
entries about Derwick.

So here is a piece of free,
unsolicited advice for companies, like Derwick Associates or
Smartmatic,
trying to deal with perfectly valid criticism: be discreet, fly
quietly into the horizon in your Falcon 2000 with your fraudulent
fortune, knowing that the more you scream and attack, the more
attention you will receive. As another blogger aptly put it:
intimidating
bloggers and journalists is never, ever, a good strategy.

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Alek Boyd created Vcrisis.com and started blogging about Venezuela in Oct. 2002. Since, he has worked as an independent researcher, reporter, lobbyist, civil and political rights activist, and has experience in strategic and media consulting throughout Latin America. In 2006, Alek became the first blogger ever to shadow a presidential candidate in Venezuela. In 2009 he gained a MA (merits) in Spanish American Studies (King's College London). Alek can be contracted to do due diligence on individuals and companies in Venezuela and LatAm. Contact: @alekboyd, or alek dot boyd at gmail dot com.

Most of the investigations I've published in the last 10 years are related to individuals and companies with suspect connections to Hugo Chavez's regime, whose actions would've gone unnoticed otherwise. Exposing the $2-trillion dictator is no easy task, and so donations are always welcome.